By Phillip J. Miller, of Segal McCambridge
On April 18, 2025, the U.S. District Court for the Southern District of New York (Hon. Gregory J. Woods) denied Joel Pena’s motion to dismiss the counterclaims of Miami Heat Limited Partnership (“Miami Heat”), which sought a declaratory judgment and cancellation of Pena’s federal and state trademarks.[1] Miami Heat raised those counterclaims in response to the lawsuit that Pena initiated, which accused Miami Heat of trademark infringement. In denying Pena’s motion to dismiss, the Court held that Miami Heat stated a prima facie claim that Pena abandoned the contested marks during the period from 2017 through 2024, during which Miami Heat sold the allegedly infringing products.
Background
Joel Pena, appearing pro se,commenced a trademark infringement action on August 23, 2024, against multiple defendants, of which only Miami Heat is relevant for this discussion.[2] Pena is a fashion designer and apparel industry entrepreneur who claimed to own the federal trademark for CULTURE TV, as well as the Florida State trademarks for CULTURE TV and CULTURE, since 2017. According to the Court’s decision, Pena also filed an application with the U.S. Patent and Trademark Office (“U.S.P.T.O.”) (Application No. 97520488) in August of 2024 for the mark CULTURE,[3] which was allegedly pending during this litigation.[4] Pena alleged that Miami Heat, a retailer of apparel associated with the professional basketball team of the same name, infringed on his CULTURE marks by selling CULTURE-branded apparel without his authorization.
In its Answer to the allegations, Miami Heat raised counterclaims that demanded 1) a declaratory judgment that it has superior rights to the relevant marks,[5] and 2) cancellation of Pena’s marks due to abandonment from lack of continuous use in commerce.[6] On December 10, 2024, Pena moved to dismiss Miami Heat’s counterclaims, leading to the instant decision.
Alleged Use in Commerce of the CULTURE Marks
Although Pena alleged that he began selling clothing items with CULTURE marks as early as 2017, Miami Heat argued that Pena’s first use of the marks did not occur until June 2024. At that time, Pena had a public Instagram page where he posted stock images of clothing with “Culture” digitally affixed to the images. Despite a link in the bio section of Pena’s Instagram page to purchase the CULTURE-branded items at www.culture.today, the website was inactive until at least September 2024. Any attempt to access that website before then resulted in a message reading, “Sorry, this store is currently unavailable.” Interestingly, the website was inactive until one month after Pena commenced the infringement action.[7]
The Miami Heat basketball team began publicly using the phrase “Heat Culture” to describe the team, and it became part of the team’s marketing and promotional strategy. By the 2016-2017 NBA season, Miami Heat was actively selling apparel that featured the mark CULTURE in its retail stores and online. It was also marketing the CULTURE-branded apparel items on its social media accounts as early as March 2017.[8]
Discussion
Pena moved to dismiss Miami Heat’s counterclaims for failure to state a claim, arguing that they were duplicative of its affirmative defenses and that Miami Heat’s use of the marks was “ornamental,” and thus not protectable. The court held that Miami Heat’s counterclaims were not duplicative, since they asserted that they had the definite intent and apparent ability to continue to use the marks in commerce, having utilized the marks since as early as 2015 on apparel and entertainment services.[9] The court refused to entertain Pena’s argument that Miami Heat’s use of the marks was “ornamental” because it would be a fact intensive matter that cannot be addressed at the motion to dismiss stage.[10],[11]
With Pena’s arguments out of the way, the court then ruled on the viability of Miami Heat’s counterclaims: 1) priority and senior use, and 2) Pena’s abandonment of the marks. One of the fundamental premises underlying the registration provisions in the Lanham Act is that trademark rights flow from priority, which is acquired through use.[12] Common law principles also state that “the first person to use a mark ‘obtains an enforceable right to exclude others from using it, as long as the initial appropriation and use are accompanied by an intention to continue exploiting the mark commercially.’”[13] The court found that Miami Heat sufficiently stated a plausible claim for relief based on priority and senior use, since Miami Heat 1) used the marks “CULTURE” and “COURT CULTURE” in marketing and on team-branded apparel as early as 2015-2017, 2) sold over 100,000 units of apparel bearing those marks worth over a million dollars, and 3) pursued registration of the marks and continued to use them commercially.[14]
Regarding Miami Heat’s claim for cancellation of Pena’s trademarks,[15] the court considered three arguments: 1) Likelihood of Confusion; 2) Fraudulent Trademark Filing; and 3) Abandonment. It granted relief, however, on only two of those arguments. As to the likelihood of confusion, the court held that such is a question of fact not appropriate for resolution at this stage in the action.[16] As to fraudulent trademark filing, the court held that Miami Heat alleged sufficient facts to support it.[17] Specifically, Miami Heat alleged that Pena made knowing misrepresentations in his U.S.P.T.O. and Florida trademark applications by stating that he was using the marks in connection with apparel sales as early as 2017. Miami Heat’s investigation revealed, however, that Pena had not used the marks in commerce until at least 2024. The court held that such a false representation by Pena, if true, would constitute a knowing attempt to mislead the U.S.P.T.O. The court deemed the falsehood material, given that a statement regarding actual use is the entire purpose of an application to the U.S.P.T.O.[18] As to abandonment, the court held that Miami Heat adequately pleaded that Pena abandoned the marks. The party asserting abandonment bears the burden of persuasion with respect to two facts: 1) non-use of the mark by the legal owner, and 2) lack of intent by that owner to resume use of the mark in the reasonably foreseeable future.[19] As to the first prong (non-use), Miami Heat alleged that Pena did not use the mark for three consecutive years, given that Pena’s first use of the mark “CULTURE” was alleged to have occurred in June 2024, his domain was inactive until at least September 2024, and there is no evidence that he was publicly selling clothing bearing the marks at any time.[20] Because the facts supporting the allegation of non-use for three consecutive years is prima facie evidence of abandonment,[21] Miami Heat was not required to allege facts at this stage related to the second prong (lack of intent to resume use).[22]
Finally, the court held that Miami Heat’s claims for cancellation were not preempted by the Lanham Act. Pena had argued that the Lanham Act preempted and precluded Miami Heat’s challenge to his Florida trademarks, but the court disagreed. It stated that Miami Heat’s challenge to Pena’s federally registered mark relied correctly on the Lanham Act,[23] while the challenge to Pena’s Florida-registered marks correctly relied on state law, namely Fla. Stat. Ann. 495.101.[24]
Thus, the court denied Pena’s motion to dismiss in its entirety, and Miami Heat’s counterclaims seeking declaratory judgment and cancellation of Pena’s trademarks will move forward, reaffirming the principle that use rather than registration is the basis of federal trademark rights in the United States.[25]
[1] Joel Pena v. Miami Heat Limited Partnership, et al., No. 1:24-cv-6378-GHW, 2025 U.S. Dist. LEXIS 74555, 2025 WL 1150710 (SDNY April 18, 2025). All facts herein are from this Memorandum Opinion & Order.
[2] This decision is in response to Miami Heat’s counterclaims and Pena’s motion to dismiss those counterclaims; the other defendants did not join in these arguments.
[3] A review of the United States Patent and Trademark Office’s Trademark Status and Document Retrieval system shows that Trademark Serial Application No. 97520488 is for CULTURE TV, not CULTURE, and Pena filed that application in 2022, not 2024. The court does not address these incongruencies. See, https://tsdr.uspto.gov/#caseNumber=97520488&caseSearchType=US_APPLICATION&caseType=DEFAULT&searchType=statusSearch (last visited 9/7/2025).
[4] An application for the mark CULTURE is pending in the U.S.P.T.O., but that application was filed by Miami Heat, not Pena, and it was filed in 2023, not 2024. See, https://tmsearch.uspto.gov/summary?serial=98014465 (last visited 9/7/2025).
[5] Federal courts can issue declaratory judgments to declare the legal rights and obligations of parties in a case of actual controversy within its jurisdiction. See, e.g., 28 U.S.C. § 2201.
[6] Any person who believes that they are or will be damaged by someone else’s trademark registration may file a petition to cancel that registration. See, e.g., 15 U.S.C. § 1064.
[7] Pena, infra note 10 at *3-5.
[8] Pena, infra note 10 at *5-6.
[9] A court may strike a counterclaim when it is merely a mirror image of an opposing party’s claim and serves no independent purpose. See, e.g., Worldwide Home Prods. v. Bed Bath and Beyond, Inc., no. 11-cv-3633 (LTS), 2013 U.S. Dist. LEXIS 9146, 2013 WL 247839, at *2 (S.D.N.Y. Jan. 22, 2013). In doing so, the court must consider whether the case or controversy would still exist in connection with the counterclaim if the court entered a judgment dismissing the opponents claim. Id. Here, the court found that the case or controversy involving Miami Heat’s use of the marks would still exist even if Pena were to withdraw his current claims prior to a ruling on the merits.
[10] Joel Pena v. Miami Heat Limited Partnership, et al., No. 1:24-cv-6378-GHW, 2025 U.S. Dist. LEXIS 74555 at *13, 2025 WL 1150710 (SDNY April 18, 2025).
[11] When a mark on an item is “ornamental,” it is perceived as decorative or expressive, and it is not seen as an identifier of the source of the item. See, e.g., In re Peace Love World Live, LLC, 127 USPQ2d 1400 (TTAB 2018) [precedential] (Opinion by Judge Marc A. Bergsman) (denying registration for “I Love You” on bracelets).
[12] ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 146-47 (2d Cir. 2007) (citing 15 U.S.C. § 1057(c)) (registration of mark “shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect…”).
[13] Pena, supra note 10 at *14-15, citing La Societe Anonyme des Parfums Le Galion v. Jean Patou, Inc., 495 F.2d 1265, 1271 (2d Cir. 1974).
[14] Pena, supra note 10 at *15-16.
[15] 15 U.S.C. § 1119 (“In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action.”).
[16] “The issue of likelihood of confusion turns upon “whether ordinary consumers are likely to be misled or confused as to the source of the product [or service] in question because of the entrance in the marketplace of the junior user’s mark.” See Pena, supra note 10, at *17, citing Guthrie Healthcare Sys., v. ContextMedia, Inc., 826 F.3d 27, 37 (2d Cir. 2016).
[17] A party seeking cancellation based on fraud must show that the statements made to the U.S.P.T.O were “knowing misstatement[s] of material fact that indicate a deliberate attempt to mislead” the U.S.P.T.O. MPC Franchise, LLC., v. Tarntino, 826 F.3d 653, 658 (2d Cir. 2016).
[18] Supra note 10 at *20-21.
[19] ITC Ltd., supra note 12 at 146-47.
[20] See, 15 U.S.C. § 1127 (“Nonuse for 3 consecutive years shall be prima facie evidence of abandonment.”).
[21] Ibid.
[22] See, Emmpresa Cubana Del Tabaco v. Culbro Corp., 213 F. Supp 2d 247, 268 (S.D.N.Y. 2002) (prima facie evidence in this context means a rebuttable presumption of abandonment that eliminates a challenger’s burden to establish the intent element of abandonment as an initial part of its case).
[23] See, 15 U.S.C. § 1119.
[24] See, Matal v. Tam, 582 U.S. 218 (2017) (citing McCarthy on Trademarks and Unfair Competition § 19:3, at 19-23 [explaining that the federal system of registration and protection does not preempt parallel state law protection, either by state common law or state registration]).
[25] See, e.g., In re Int’l Flavors & Fragrances, Inc., 183 F.3d 1361, 1366 (Fed. Cir. 1999).
